Home repossessions rocketed by 65 per cent last year as interest rate rises hit owners already struggling to keep up with monthly repayments.
The Council for Mortgage Lenders said that 8,860 homes were repossessed in the last six months of 2006, bringing the total for last year to 17,000.
And with more interest rate rises expected in 2007, it looks set to be another year of misery for many of Britain’s over indebted.
Chiltern Debt Management general manager Jackie Newton says: “With house prices high and continuing to rise significantly, people are being forced to stretch themselves more and more in order to move-up, or even get on to, the property ladder.
“As a result, a growing number of people are putting themselves in an exceptionally vulnerable position when faced with even the most moderate of rate rises.”
Shadow Chancellor George Osborne says: “Despite the Chancellor’s boasts, incomes are failing to keep up with the rising cost of living.”
In addition to the rising costs for homeowners personal debt jumped by 10.6 per cent to £1.25tr over the last year according to figures from national money education charity, Credit Action.
This means the average Brit now owes £27,445 (including mortages), a total that grew by £265 in the last month of 2006.
“Wherever you look figures relating to debt, and the effects it is having on the ordinary person, are getting worse. The cost of living is rising at a greater rate than income, debt is rising, repossessions are increasing and concerns about the impact over-indebtedness will have on this country are growing,” warns Ms Newton.
“People need to think carefully before they take out any kind of credit facility, whether it be a store card, a credit card, a personal loan or even a mortgage. Ask yourself whether you can afford it and if the answer is not a resounding yes then resist the temptation.”
